Judgement of the Tokyo District Court on May 27, 2009 (Case Number: 2009-WA-638)
- Tokyo District Court acknowledged the validity of cancellation of building lease contract based on four months’ non-payment.
- Individuals (lenders) vs. an individual (tenant’s joint surety)
- Claim to pay unpaid rent and damages based on cancellation of lease contract
Location and Purpose of Use of the Building
- The tenant was arrested based on suspicion of embezzlement in the pursuit of social activities. The tenant was kept in custody in the Tokyo detention facility.
- In the lease contract, there was a special clause providing that the lender can cancel the contract without any demand if the tenant fails to pay the rent.
- As the tenant did not pay the rent for 4 months, the lender canceled the lease contract, demanded eviction to the tenant based on cancellation of the lease contract, and demanded payment of unpaid rent and damages to the tenant’s joint surety.
- The court’s judgement ordering the tenant to surrender the building became final and binding.
- The tenant’s joint surety argued that cancellation was invalid because the lender did not demand payment to the joint surety before cancellation.
- The court denied the surety’s allegations judging that there is no need for the lender to demand payment to the surety before cancellation, and that the relationship of mutual trust between the lessor and the tenant was dissolved considering that the tenant delayed payment of four months’ rent and appeared not be able to pay the rent because of custody in the detention facility.
- The court acknowledged that the lease contract was validly cancelled based on four months’ non-payment of the rent.
- This is one of the cases that cancellation of building lease contract based on four months’ non-payment was acknowledged.